Morris Publishing Group, which owns 13 daily newspapers, says it will file a prepackaged bankruptcy reorganization plan which has the support of the majority of its debt holders. The Chapter 11 route was taken after Morris was unable to achieve nearly unanimous support for a debt swap.
Under the abandoned debt swap, Morris offered to trade $100 million of new notes for its outstanding old notes of $278 million. That move would have required 99% acceptance by note holders. While support was overwhelming, it still fell short at 92%.
Under the terms of the restructuring plan agreed to by holders of approximately 75% of the debt, Morris and its subsidiaries will file voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code on or prior to January 19th. If the Plan is confirmed by the Bankruptcy Court, 100% of the old notes, plus all accrued and unpaid interest, will be canceled, and holders will receive their pro rata share of new notes.
Morris Publishing Group is owned by Morris Communications, a privately owned company. The bonds registered with the SEC cover only Morris Publishing Group, not the other holdings of Morris Communications, which include radio stations, magazines and other media-related operations.